Based on two new ministerial decrees from December 4 and 9, 2024, the Ministry of Finance has introduced new obligations arising from Legislative Decree No. 13 of February 12, 2024, which were discussed in the previous communication (to which we refer for further details).
According to the new article 35, paragraph 7 of quarter d.P.R. 633/72 (“VAT Decree”) and the updated version of article 17, paragraph 3 of the VAT decree, entities intending to act as tax representatives for foreign entities not established for VAT purposes in Italy must meet the following requirements:
- Compliance with personal integrity requirements outlined in article 8, paragraph 1, letters a) to d) of Ministerial Decree No. 164 of May 31, 1999;
- Submission of a notarial deed according to articles 46 and 47 of Presidential Decree No. 445/2000, confirming compliance with the personal integrity requirements;
- Provision of the appropriate guarantee to the competent tax authority if representing more than one entity;
- Verification of the completeness of the documentation and information provided by the foreign entity to ensure its VAT number is included in the VIES database and its compliance with the data in the representative’s possession.
Tax representatives who meet the integrity requirements and have provided the required guarantee will be available on the Italian tax authorities’ website.
However, representatives who fail to meet the new guarantee obligations may be subject to an administrative fine ranging from 3,000 to 50,000 euros, with no possibility of cumulative penalties.
The required guarantee must be submitted personally by the tax representative and may take one of the following forms: government bonds, a bank guarantee, or an insurance policy. The amount of the guarantee depends on the number of entities represented, ranging from 30,000 euros (for 2-9 entities) to 2,000,000 euros (for over 1,000 entities).
Additionally, the Ministry of Finance, in the decree of December 4, 2024, defined the details regarding the guarantees that non-EU taxpayers must present to conduct intra-community transactions in Italy. This guarantee must be submitted by the foreign entity or its tax representative to the Italian tax authorities and must meet the same formal requirements as the guarantees for tax representatives. The minimum guarantee amount is 50,000 euros and must remain valid for at least 36 months.
The Italian tax authorities and the financial police will conduct risk analyses to identify tax representatives of non-EU entities who may have issues in fulfilling the document verification obligations.
Both changes will come into effect after the issuance of two regulations by the director of the Italian tax authorities, who will address operational details.
It is also important to note that these changes will apply to tax representatives and non-EU entities already involved in intra-community transactions before the regulation comes into effect. Representatives performing these functions at the time of the publication of the regulations will be required to submit the necessary declarations within 60 days to avoid the expiration of the foreign entity’s VAT number. Similarly, non-EU entities already registered in VIES will be required to submit a guarantee within 60 days, or they will be removed from this database.